Scott Winship summary on mobility and inequality

…evidence on earnings mobility in the sense of where parents and children rank suggests that our uniqueness lies in how ineffective we are at lifting up men who were poor as children. In other words, we have no more downward mobility from the middle than other nations, no less upward mobility from the middle, and no less downward mobility from the top. Nor do we have less upward mobility from the bottom among women. Only in terms of low upward mobility from the bottom among men does the U.S. stand out.

Doesn’t every increment of upward mobility have to be balanced by downward mobility? If there is lower upward mobility from the bottom it has to be compensated by lower downward mobility somewhere else?

Kind of. Downward mobility in the form of the rich outbreeding the poor is indicative of an improving society, despite people cherishing observed upward mobility like it’s a good thing in and of itself.

Judging from the link Scott provides, countries that do the same (some slightly better, some slightly worse) than the US in this regard are the UK, France, Spain, and Italy. Australia, the Nordic countries, and Canada do better.

An intriguing footnote from that link also states that the results are the same when considering only children of immigrants:

Studies of the intergenerational mobility of immigrants in both countries have found that the father-son
earnings elasticities are no different than for the overall population: ranging from 0.4 to 0.6 in the
United States and essentially 0.2 in Canada.

The lower the elasticity the higher the mobility, so in Canada migrants are considerable more mobile than in the USA. Zero means there is no relationship at all between father-son earnings, while 1 means that all sons are in the same relative position as their fathers.

But the fact that immigrant mobility is roughly the same as native mobility suggests to me that the causes of higher mobility are not related to immigrant status.

[Self important narrator’s voice as a dramatic aside] Nobody ever expects the US Judicial System. [scene behind self important narrator: Men in black robes rushing hurriedly through the streets knocking on doors]

Observed mobility is not the same as opportunity for mobility due to assortative mating and general heredity, as I always say around here. Policy decisions should be based off discussions of the latter, not the former.

A perfect meritocracy would result in de facto castes due to heredity and assortative mating, as pointed out before by Razib on GNXP and Harpending and Cochran on WestHunter.

Define “just”. If you and I play ping-pong and you regularly win because you were born with better hand-eye coordination (or a better attention span and willingness to practice), this would typically be seen as a “just” outcome.

Well it depends. Are the elite the elite just because of their IQ, or because they use that IQ to do things that turn them into the elite? An elite made up of effective doctors, entertaining writers (Dave Barry, Tyler Cowan), entrepreneurs like Steve Jobs, etc, is very different on their effects on the rest of society to an elite that is there just because they inherited a high IQ, regardless of whether they do anything useful with said IQ.

I can’t tell if this is a captain obvious point, but how much of this is just because black people have no upward mobility? Did they control for that? A quick scan of the article suggests it wasn’t discussed which is sort of crazy since it is the elephant in the room.

Really, it’s surprising mobility is as high as it is in a society where you can be as well fed, clothed, and housed as one can here and now without working very hard. I was pretty happy with my lifestyle when I made <$20K, it was only for pursuit of status that I moved on to (allegedly) better things.

Indeed, gains in happiness from gains in income fade quickly as people re-adjust their expectations and their peer group. People seem to be more concerned with relative differences in income than absolute standards of living.

Yeah, that’s what I wonder about. If at minimum wage you can have a lifestyle that in absolute standards is the envy of virtually everyone who lived before 1900 and half the world today, how strong can the incentive to produce really be?

Not sure about that. I know there are studies distinguishing “happiness” from “life satisfaction.” If I recall, the latest “happiness” research indicates that absolute standards of living are very important, as one would expect. “Happiness” may by a personality trait more than anything else.

“Happiness” studies (hedonic studies in general) are sort of bullshit, in my opinion. Getting people to put a simple numerical rating on such a complex and subjective thing introduces too much error for them to be useful.

Just a few days ago you were defining poverty as an annual income below $60,000, later revised upward to $80,000. I don’t know what you need to be happy, but it’s something on the order of a major cocaine habit and subscriptions to every Elsevier journal.

TallDave, median income among men in the United States in 2010 was $32,000. Among white men, it’s $34,000. Whether there is a welfare system or not, men who are not educated above the high school level or do not have specific in-demand skills face pretty low returns to hard work.

Of course, the low level of mobility may involve a bunch of people making individually rational choices but then that really doesn’t address the main issue. After all, if returns to work are much lower among those without a decent education, improving the quality of education (easier said than done, I know) might improve mobility. Likewise, we might look at why median wages for men are so low and whether some policies might help wage growth over time and give more men an incentive to work harder. Have Canada and the Nordic countries also experienced such a crappy level of median wage growth for men over the same time period?

Freedom to fail, i.e., downward mobility, is an under-appreciated concept. Idiots with cash flow who buy dot-bomb stock and over-leveraged McMansions should be smacked, and their assets (and their debt) redistributed at realistic values. The market will do this just fine.

TBTF policy prevents downward mobility. There is also a long list of fiscal and monetary policy designed to inhibit upward mobility. These are the economics of a banana republic.